Archive for the 'Foreclosure Rescue Scams' Category
Sacramento Hearing Addresses Foreclosure Crisis in California
November 19th, 2009 Categories: Default News, Foreclosure Rescue Scams, Loan Modification, Pre Foreclosures, Shortsales
SACRAMENTO /California Newswire/ — Assemblymember Pedro Nava (D-Santa Barbra), Chair of the Assembly Banking & Finance Committee, led the second in a series of informational hearings today to examine California’s foreclosure crisis, the state’s current loan modification programs, and methods by which the state could improve procedures to help struggling California homeowners. Nava was joined by Nevada Assembly Speaker Barbara Buckley, housing experts, representatives from the banking and mortgage industry, and state and local non-profit housing and consumer organizations.
“This crisis has devastated thousands of California families and communities. It’s time to take a new approach to help families remain in their homes. Today’s hearing provided more evidence that our existing loan modification programs have been ineffective and the number of families benefiting from them is minimal,” said Assemblymember Nava. “I will continue to work with all the stakeholders who testified today to come up with viable and effective solutions, including the establishment of a loan mediation program.”
California continues to have the third highest foreclosure rate in the nation, with one in every 144 homes in some stage of the foreclosure process. While these numbers have decreased from last year, 400,000 were nonetheless foreclosed on in California in 2009. Thus far, federal and state efforts to encourage banks and servicers to modify borrowers’ loans have largely been on a voluntary basis, and those who need help are subsequently falling through the cracks. California needs a new direction and the implementation of a loan mediation program may be one of the solutions.
Assembly Bill 1588, sponsored by Los Angeles Mayor Antonio Villaraigosa, was recently introduced by Assemblymember Nava and California Assembly Speaker Karen Bass. The measure will establish a monitored mediation program to help homeowners and lenders reach sustainable loan modifications. Under AB 1588, if attempts at loan modification fail, a reasonable transition plan would be established by the borrower and lender. This type of mediation program has proven successful in numerous other states and cities.
“Families working to turn around the economy need the financial system to work for them to avoid foreclosure,” Assembly Speaker Karen Bass (D-Los Angeles) said. “AB 1588 builds upon successful mortgage workout programs other states have used to bring lenders and homeowners together to find alternatives to foreclosure. By providing the monitoring necessary for this process to succeed in California’s tough housing market, I’m confident this legislation will help more families stay in their homes and keep communities intact.”
Nevada Assembly Speaker Barbara Buckley testified today before the committee, stating that she believes Californians can benefit from a program similar to the one she sponsored in Nevada. “No matter where we live, it is critical that we do all we can to help reduce the number of foreclosures and help people stay in their homes. Our program in Nevada has shown initial success in stemming foreclosures. While I understand the obstacles California faces as a non-judicial foreclosure state, I look forward to working with the California Legislature to find ways that a similar program could be implemented, said Speaker Buckley.”
Over the next several weeks, Assemblymember Nava will analyze the testimony given at the hearings regarding loan mediation programs and work with stakeholders to determine how to best move forward to address the current crisis and lessen the detrimental impact on California families.
“I am honored to have Nevada Assembly Speaker Barbara Buckley at the State Capitol today to testify on her successful foreclosure mediation program. I look forward to working with her as we make progress with California’s own monitored mortgage workout program,” said Nava.
| Discussion: No Comments »
California Campaign Targets Loan Modification Scams
October 29th, 2009 Categories: Foreclosure Rescue Scams, Loan Modification, Real Estate News, Real Estate Trends
LATIMES: A national housing nonprofit has launched an education campaign in Southern California to combat scams targeting homeowners in peril of foreclosure.
Loan modification fraud is on the rise, costing troubled homeowners thousands of dollars up front for mediation and counseling services that are provided free by federally approved nonprofits, Eileen Fitzgerald, chief operating officer of NeighborWorks America, said Monday at a news conference on the steps of Los Angeles City Hall.
Washington-based NeighborWorks is starting its yearlong national education effort in Southern California because the region has been hit particularly hard by the foreclosure crisis, she said.
Troubled borrowers often pay fees ranging from $1,500 to $3,000 for help in reducing their mortgage payments, Fitzgerald said. The companies, in turn, promise to negotiate with their lenders on their behalf. In some cases the companies promise that loan amounts will be modified, a result that is difficult and rare, she said.
In addition to money paid to unscrupulous companies, those facing foreclosure can lose precious months that could be better spent with federally approved nonprofit counselors who don’t charge for their services, Fitzgerald said.
Poorly informed homeowners desperate for help turn to loan modification consultants — who often are attorneys, mortgage brokers or real estate agents — advertising on radio and television and in print.
“They are very good marketers,” Fitzgerald said.
California Atty. Gen. Jerry Brown’s office has reported receiving more than 2,500 complaints against loan modification consultants and businesses through Oct. 14 of this year, up from 163 in all of 2008.
Seniors, Latinos, African Americans and Asian Americans have been particularly victimized and will be a focus of the education campaign, Fitzgerald said.
For the next three weeks, community organizers and volunteers with NeighborWorks and its local affiliate, Los Angeles Neighborhood Housing Services, will be distributing marketing materials to warn people about loan modification fraud. The first stop Monday was the WorkSource center in Sun Valley.
“Many of these families believe they have nowhere to turn, nowhere to go for help or assistance,” Los Angeles Mayor Antonio Villaraigosa said at the news conference.
In April, the Los Angeles City Council passed an ordinance imposing penalties on companies that charge for such services.
Zulma Navarrete said that over the last year she had bad experiences with two loan modification companies.
The 36-year-old native of Guatemala, speaking in Spanish at the news conference, said the first company charged her about $2,000, and the second, a law firm, charged her $3,495. Neither has persuaded the lender to reduce the $2,900 monthly payment on her three-bedroom Huntington Park home.
Navarrete said she got her money back from the first company but not from the law firm.
“I was robbed,” she said. “And I want my money returned.”
| Discussion: No Comments »
New Loan Modification Law May Shut Down Many Sacramento Loan Mod Shops
October 28th, 2009 Categories: Foreclosure Rescue Scams, Loan Modification, Mortgage and Loans, Sacramento Real Estate
Effective immediately, SB 94, which became effective Oct. 11, will ensure anyone selling loan modification services will take money only after they do what they have promised. Also they must advise potential customers that they can actually negotiate a modification with their lender on their own or obtain help free of charge from nonprofit counseling agencies that are pre-approved by the Department of Housing and Urban Development.
The law includes penalties up to $10,000 and up to a year in jail for violation of the law for an individual and a fine of up to $50,000 for a corporation.
Consumer advocates called the law “a step in the right direction,” but say more needs to be done to make loan modifications easier to accomplish in order to reduce the frustration that leads homeowners to hire the unscrupulous.
No Telling exactly how Sacramento areaq Modification shops are dealing with the law… It’s too early to tell.
| Discussion: No Comments »
